KARACHI, Dec 21: The government’s borrowing for budgetary support in five months and ten days has crossed the target for the whole year 2005-06. The speedy borrowing took a jump of Rs27 billion in just a week to reach a total of Rs101.379 billion against the target of Rs98 billion set for the year 2005-06. The government had borrowed Rs89.674 billion in the corresponding period of the last year.

The budgetary borrowing, last week, stood at Rs83 billon but the fast growth in borrowing has set a new trend which might lead to a very high figure of budgetary borrowing by the end of the fiscal 2005-06.

Experts said that the government spending had increased in the wake of huge diversion of funds towards the earthquake hit areas in the north of the country.

The international donors and foreign countries have pledged over $6 billion as grants and loans but the offers are yet to be materialized. Presently, the government is spending its own money to help the 3 million quake’ affected people as it has announced to spend Rs80 billion as compensation to the victims and construction of houses.

Analysts said that the borrowing trend could impact upon the budget deficit negatively, and it might be over 4 per cent if the trend persists. The government wants to keep the budget deficit around 4 per cent of GDP.

Some independent economists have advised the government to issue Bonds of various maturities to get money to help the earthquake victims, instead of using the donors’ loans. However, the government has not yet come up with any clear strategy for the reconstruction and rehabilitation of the affected people.